When do I need a vested benefits solution?
When you withdraw from a pension fund, you need a vested benefits solution – ideally with the option to invest your saved pension fund credit profitably and in exactly the manner you want.
A vested benefits solution could be an option in the following scenarios:
- Taking time out: if you’re embarking on a long language-training stay, taking a sabbatical, pursuing training or further education or taking parental leave
- Break from work or unemployment: if you are not in gainful employment, even if you receive unemployment benefits
- Emigration: you can invest your money (or part of it) into a vested benefits account in Switzerland, ideally in a low-tax canton and with digital access to an online app.
- Self-employment: you can invest your saved pension fund credit (or part of it) into a vested benefits solution directly.
- Early retirement
- Change of career: if the break between jobs lasts longer than 6 months
- Change of employment level: if you fall below the entry threshold for pillar 2, you are no longer insured by the pension fund.
- Divorce: depending on the situation, you may need a vested benefits solution after a divorce
How safe are my vested benefits at Tellco?
In the event of bankruptcy, an account holder’s vested benefits are covered by depositor protection up to CHF 100,000. This means that the money falls under class two rather than class three of the bankruptcy assets. Vested benefits invested in securities or investment funds are even better protected: securities qualify as special assets and do not form part of the bank’s estate in the event of bankruptcy.
How can I transfer my vested benefits to Tellco?
You can register on the Tellco ePlix online app, and you’ll then be able to request a form to transfer your pension assets with just a few clicks.
If you already have a vested benefits account, you can send this form directly to your previous vested benefits institution. You can change your provider at any time – taking into account the existing notice periods and the legally prescribed maximum number of vested benefits accounts.
If you have withdrawn from a pension fund for one of the aforementioned reasons and do not yet have a vested benefits account, you can send the form directly to your previous pension fund.
What is the difference between an account solution and a securities solution?
The difference lies in the securities portion. With an account solution, 100% of your pension assets are deposited in a fixed-interest account, with a 0% securities portion (no risk). A portfolio or custody account, on the other hand, has an account portion and a securities portion. The securities portion, and in particular the share quota, may vary depending upon the risk class chosen.
What investment options do I have?
At Tellco, you can compile your vested benefits solution to suit your taste. For example, you can use one of the four tried-and-tested Tellco strategy funds. You can even choose to further diversify these funds with exciting thematic funds. If you’re looking for a fully individual strategy, we also offer a wide range of cost-effective ETFs (exchange-traded funds). Further information and the fund selection list can be found here:
Can I have multiple vested benefits accounts or custody accounts?
As a fundamental rule, multiple vested benefits accounts are legally permissible. At Tellco, you can open a total of two vested benefits accounts or custody accounts, provided that your vested benefits come from two different pension plans.
Can I make subsequent payments for missed years or make voluntary contributions to my vested benefits account?
No, voluntary contributions or subsequent payments or deposits are not permitted by law. Assets can only be transferred from a pension fund or from another vested benefits account.
My new employer’s pension fund is saying that I have too many pension assets. What does this mean?
Changing jobs and therefore having a new employer and a new pension fund will lead to a transfer of your pension assets. As a result, it may be the case that your current pension assets are too high due to the change in pension plan. This may be the case if you are now receiving a lower salary, for example, or if your new employer’s pension plan generally prescribes lower savings rates.
If this is the case, you can invest your excess assets into a vested benefits account or park them.
When can I withdraw my vested benefits capital in the ordinary manner?
You can withdraw your vested benefits five years before retirement at the earliest (as of 2023: age 64 for women and age 65 for men), or five years after the ordinary OASI retirement age at the latest.
Please note that it is not possible to opt for the periodic payout of your vested benefits capital. This means that you cannot withdraw your vested benefits in the form of a monthly pension.
Can I withdraw my vested benefits before I retire?
You can withdraw your vested benefits before ordinary retirement in the following cases:
- If self-employment is your primary source of income in Switzerland
- Under the terms of the promotion of home ownership (PHO) programme
- If you emigrate out of Switzerland
Note: if you move to an EU/EFTA country, only the non-mandatory component of your vested benefits can be withdrawn.
What can I do if I’m about to retire but the stock market situation isn’t great?
In general, an unfavourable stock market situation isn’t a problem, as you can choose to postpone the payout of your vested benefits for up to a maximum of five years after reaching ordinary retirement age (as of 2023: (64 for women and 65 for men). If the stock market situation improves again, you can liquidate your investment and withdraw your vested benefits.
Do you want to delay the payout of your pension assets?
With us, you can have your pension assets transferred to your private custody account as securities at the time of the payout.
Payout of vested benefits: important changes in the law from 2024
The OASI 21 reform includes a revised law that will enter into force on 1 January 2024 impacting the withdrawal of vested benefits payments.
Up until now, it has been possible for the insured person to postpone the payout of vested benefits for up to a maximum of five years after reaching normal retirement age (as of 2023: 64 years of age for women and 65 years of age for men).
However, there will now be a restriction:
You can only postpone withdrawal if you continue to work beyond the normal retirement age. This means that if you reach normal retirement age and do not continue working, you must have your vested benefits paid out to you.
The legislator has, however, granted insured persons a transitional period:
Those reaching their normal retirement age (new: reference age) between 2024 and 2029 may still postpone the payout of vested benefits, even if they are no longer in gainful employment – although this is for a maximum period of five years or, at the latest, up until the end of the transitional period on 31 December 2029.
If you are due to retire soon, we recommend checking your pension situation and, if necessary, adjusting your pension plans.
What do I need to keep in mind for tax reasons?
Vested benefits and returns are tax-free, provided that the capital is invested in a vested benefits account. This means that taxes are not due until there is a payout, even if you transfer your capital to another pension institution. We therefore recommend that you delay the withdrawal of your pension capital for as long as possible.
Taxes are not due until one of the following situations occurs:
- Retirement: if you withdraw your vested benefits capital as a result of taking retirement, your capital will be taxed in your canton of residence. In Switzerland, the lump-sum withdrawal is taxed separately from other income and assets at a reduced rate, which is worked out using a different calculation basis depending on the canton. You can get more information about this from your canton of residence directly.
- Withdrawal due to self-employment: if you decide to have your vested benefits paid out due to going self-employed, you will be taxed in your canton of residence (or in the canton of the vested benefits foundation, if you live outside of Switzerland).
- Withdrawal on the basis of the promotion of home ownership (PHO) programme: if you have your vested benefits capital paid out under the terms of the promotion of home ownership programme, you will be taxed in your canton of residence (or in the canton of the vested benefits foundation if you live outside of Switzerland).
- Payout outside of Switzerland: are you wanting to emigrate, or have you been living outside of Switzerland for a long time? As soon as you give notice of your departure from Switzerland, your vested benefits capital will be taxed at source on payout and the cantonal tax rate at the foundation location will be applied. The Tellco Vested Benefits Foundation is located in the canton of Schwyz, meaning that you will directly benefit from the lowest tax rate in Switzerland.
I am self-employed and not insured by a pension fund. Can I keep paying into my vested benefits account?
You cannot make payments into your vested benefits account. Nevertheless, in order to make the best possible provisions for your retirement, you have the option to pay up to 20% of your income or the maximum amount (as of 2023: CHF 35,280) into a pillar 3a account.
At Tellco, you have the freedom to compile your private pension to meet your precise needs and requirements. You can choose one of four Tellco strategy funds, personalise your chosen fund with exciting thematic funds or create your completely individual strategy from a fund selection list featuring a wide range of cost-effective ETFs (exchange-traded funds). Whatever you decide, we’re here for you.